Tuesday, May 29, 2012

The $100,000 Question

Singaporeans who are contemplating a new car must be wondering if it is worthwhile to buy now. This is especially so considering the sky-high Certificate of Entitlement (COE). Despite the recent drop in the prices of COE, the entitlement to drive a new car on Singapore roads still remain very expensive. Buyers need to fork out at least around $100,000 for a new car. This is by no means a small sum, even for a big ticket item. So let's examine what are the factors we should consider before damaging our pockets.

Buy for the right reason
Most Singaporeans, especially those conservative and thrifty ones, consider cars as sheer liabilities, at least in Singapore context. They argued that public transport is excellent in Singapore and hence there is no need for a car. But I beg to differ. For some people, having a car can be an asset to their job or business. For example if you are a housing agent, you definitely need a car to meet clients at different time and places. In addition, some jobs, especially those sales and marketing ones, also require candidates to possess private transport so as to meet clients. On the other hand, some Singaporeans buy car because of family needs. Imagine if you have two school going kids and wife. Having a car enables you to have that little bit more of face time with your family and provides flexibility of sending/picking them to work or school. Henceforth, buying a car may not be a flawed financial decision, but that is if you buy for the right reason.

Plan your purchase
After convincing yourself that having a car is essential for you, the next course of action is of course to do a budget based on your monthly income. The easy way would be to do a back-of-the-envelope calculation of what would be the monthly expenses and maintenance costs incurred. Besides the monthly car loan, there is a need to also consider insurance, fuel, season parking, toll charges, road tax, grooming and servicing costs. Sound scary? You bet. Owning a car is always an expensive affair in Singapore and if you are not careful about it, you can mess up your personal finance royally. So do not just consider the car loan when you calculate the expenses. Make sure you factor in the above items. Based on my experience, for a young driver below the age of 30, insurance costs and fuel usually make up the bulk of the monthly expenses. Annual insurance premiums for young drivers usually cost more than S$2000 and the monthly fuel usually costs about $300, depending on the car model.

Consider pre-owned cars
In my opinion, it is just not worthwhile to buy a new car now. If you need to buy a car, the wise choice would be to purchase a pre-owned car. Most pre-owned cars in Singapore are actually quite well maintained and in tip-top shape. In fact, many of my foreign friends asked me how come most of the cars on Singapore roads are so new compared to their countries. I told them that COE only allows the owner to drive their cars for 10 years. Beyond that, there is an option to renew it but only for another 5 years (I stand corrected!). A lot of Singaporeans feel that COE prices will only keep rising as a result of government policies. I always point out to them that in the 90s, COE prices were more than $100,000 (in those days, $100,000 is freaking huge amount of money) but crashed to $2 in the 2008 recession. So the moral of the story is that there is always a cycle and you need not be afraid of missing the opportunity to buy.

I personally think that it is not justifiable to spend foolish amount of money on a new car which can only be driven for 10 years. That is why I purchased a pre-ownded Nissan for S$40,000 with a 5 year COE validity last year. I been driving it for half a year now and it is still in good condition. To me, it is definitely a good buy.

Hope you find the above information useful.

Magically yours

Thursday, May 24, 2012

How to find a good financial advisor

Most experts recommend novice investors to engage financial adviser to help them achieve their financial goals. Yet how do we find someone whom we can trust? Over the years, I have met many financial consultants, some good, some down right bad. I would like to share with my readers some of my experience dealing with these jokers.

Title Inflation
Many of the financial advisers I met carried with them big titles like Associate Director, Vice President, Sales Director, etc. A lot of them were also quite young. I think many of them suffered from the mistaken belief that if they carry big titles, customers will respect them more and will be more inclined to buy from them. Actually I don't care about titles when I look for a financial consultant. To me, titles are just job designation. But normally I would look out for someone who is a Certified Financial Planner. I would give the fellow slightly more face-time.

Know your needs
Before you even sat down with the financial adviser, make sure you know what you need. Not all planners offer comprehensive advice tailored to your needs. Decide what you want and expect from the adviser. For example, last month, I was shopping around for a medical shield plan for my baby girl and invited a financial consultant to my home for a discussion. Instead of advising me on his company's products, he enquired about the valuation of my home and asked about my pay cheque. I didn't give him a split second chance and "thank you very much" him within 20 minutes.

Find out how much they are paid
Don't be shy to ask how much commissions or fees the financial adviser will collect from you. After all, its your hard-earned money and you have the rights to know. Some advisers I came across were evasive when I pressed them for the details. If your adviser tried to brush off your queries on the commissions or fees, always demand for the specified amount you are paying him. Otherwise, just walk away from the deal.

Don't jump the gun
Many years ago, my insurance agent tried to convince me to purchase NTUC Income's Growth Plan. He shared that he himself purchase it every few years as a form of retirement plan. Indeed, I noted the many good things about this scheme but eventually didn't take up the offer. This is because I don't like the idea of tying up my money in insurance plans. I am still very young and I would rather put my hard-earned savings in fixed deposits. It's true that the return would be lower as compared to the Growth Plan but at least in emergency times, I can use the money without suffering monetary penalties. We all know that buying insurance is a long term commitment and early redemption can incur huge losses.

Magically yours

Tuesday, May 22, 2012

Investment Insights: UOB Gold/Silver Saving Account

Two years ago, I wrote two articles on my investment experience on UOB Gold/Silver Saving Account. There were many comments and queries from my readers. Firstly, I must clarify that I did not represent UOB when I wrote the articles and UOB also does not pay me for promoting their product. Secondly, I wrote the articles based on my investment experience. I had made some money from it and thus, wished to share with my readers. I will not bear responsibility for any potential losses incurred as readers need to do homework before investing or alternatively, they should seek financial consultant's advice before deciding for themselves whether to invest in this product.

Recently a reader queried the GST and fees chargeable for the transactions for UOB Gold/Silver Saving Account. Based on UOB's website, there is no GST chargeable for transactions. As for the fees, they are indicated clearly in the website for both Gold and Silver savings. I would advise investors to confirm with the bank staff before you open a Gold/Silver Saving Account with UOB. Their customer service's contact can be found in the website.

As I mentioned two years ago, UOB was the only bank that offered this scheme. And it still is. For this scheme, there is no physical gold or silver being transacted. Essentially, you are converting your deposits from money to gold/silver savings. The gold/silver savings is bench-marked to the gold and silver market prices. In purchasing gold/silver products, the investors must understand and acknowledge that:

a) Gold and silver market is very volatile
b) losses can be incurred from such investment
c) an investment in gold or silver provides no dividend yield or interest
d) prices would have to rise sufficiently over the investment period in order to yield a profit on sale

Good luck in your investment journey.

Magically yours

Sunday, May 20, 2012

Investment Insights: Importance of managing your ego and fear

In the investment circle, everyone knows the golden rule of setting targets for investments. But how many investors actually put that into practice when the crunch comes? After all, greed and fear often come into play whenever we make important financial decisions.

Uneducated investors often make irrational decisions, leading to losses in their investments. They sell their stock holdings when the stock market crashes and buy when the market booms. When they lost money, they blame their stock brokers, they blame the market, they blame the stock analysts. They blame the whole world except themselves. What most investors failed to realize is that the greatest investment enemy is within ourselves and that we failed solely because of our ego and fear.

When I started investing as a newbie 13 years ago, I belonged to this category. I felt like a winner when I made money from my stocks and a loser when I lost money. Over the year, my thinking changed as I read from self-improvement books, articles and magazines. I came to realize that managing your ego and fear is crucial to our decision-making and that when it comes to investing, it's not about winning or losing the game. It's about setting our personal targets and not let greed and fear rule our heads.

Gambling and investing are not the same. We are unable to manage the outcome of the former, but for the latter, we can always make wise decisions and produce a positive outcome. Control your destiny and grab the bull by it's horns!

Magically yours

Saturday, May 19, 2012

Investment Insight: Whether to enter the stock market now

The recent mini-correction in the stock market must have caused some jitters to many local investors. Most of us wonder whether the current Euro debt mess, which has been on-going for three years, will spark off a major world-wide stock market mayhem or taper off in a few years. My own personal view is that history will repeat itself all over again and that a major correction is coming, probably at the second half of the year.

During 2007-2008, my company announced pay adjustment for all existing employees and I remembered my pay was adjusted upwards by $550. The feeling back then was buoyant for everyone in Singapore. Fresh graduates got record high starting pay and people were making money in the stock market. Penny stocks were speculators favourite plays and volumes for these counters were extremely high. Then, reports of "sub-prime mortgages" started to surface in newspapers article. Most people just shrugged off this development in the United States. The issue dragged on for several months and soon implodded with the collapse of the Lehman Brothers. Of course, the stock markets tanked and caused world-wide mayhem. There was a U.S. Presidential Election and Obama was sworn in as the new President to deal with the financial crisis.

Fast forward to today, my new company announced a 15% pay adjustment. Last month, there was a penny stock rally. Recently, news paper reported that fresh graduates getting high salaries again, with Law graduates leading the pack. Reports of Euro debt crisis surfaced again and French has a new President. The recent developments look too similar to year 2007 - 2008 that I believe a major correction is looming.

Get ready your investment monies to shop for bargains during the crash. Grab hold of opportunity when it comes!!

Magically yours

Thursday, May 17, 2012

Investment Insights: The importance of knowing your life purposes

Recently one of my colleagues attended a personal finance workshop arranged by my company. I was very interested to attend because the topics seemed very relevant to me but eventually I was unable to make it due to work commitments. Over lunch, my colleagues updated me that the workshop indeed was very useful as it touched on various money issues in the local context, like CPF, hospitalization shields, life insurance and retirement plans. The instructor also gave tips on investments and the key concept of managing personal finances (budgeting, knowing the difference between "needs" and wants").OK, I thought to myself. These information and tips seemed rather useful but are actually quite fundamental stuff to me. Probably it could help a person become more financially astute but probably won't enable him to become a rich person one day. But what set me thinking was a statement that my friend told me the coach wanted the participants to remember for life and that is: Always question yourself and know what are your purposes in life.

Knowing our life purposes is important. We must have goals in our lives, something that we hope to achieve one day. Money itself is only a means that can probably help us attain our goals faster. But even if we became rich overnight and yet do not have any meaningful goals in life, we will only be lost and empty in our hearts. In fact, I have read numerous articles on punters winning multi-millions lotteries only to end up spending every single cent away after a few years. Ironically, most of these "lucky" souls ended up poorer than before they won the prizes. Therefore, it is important that we identify our purposes in life. Only when we know our life purposes, then can we set our life targets and determine what are the essential life skills and competencies to obtain.

In a competitive society like Singapore where virtually everybody clocks in long hours at work, we have to know ultimately what we want to achieve in life. We need to have crystallized picture of what we hope to become one day. Otherwise we would be just drifting along without aims. Don't procrastinate until its too late as life is very, very short. The worst thing in life is to have regrets. For the past two weeks, I have been thinking about my life purposes and what I hope to achieve at the end of my time. Hopefully I will be able to share with my readers my thoughts and plans real soon.

Magically yours.

Sunday, May 13, 2012

A tribute to my Mother and Father

Today is Mother's Day. Me and my siblings planned to give her a treat but she felt that the restaurants would be very crowded today. So we postponed our celebrations to next weekend.

My mom is one of the baby-boomers. She belongs to the generation who don't express love on their lips and believes in tough love, hard work and sacrifice. My mom is a great person although I am not close to her since young. This is because I used to be a very mischievous brat who liked to talk back. Of course she wasn't pleased with that and I was disciplined by her numerous times.

One of my mother's qualities is her love for my family. When me and my siblings were still studying in secondary schools, my dad suffered from a major stroke and was unable to work till now. She took on part-time jobs to supplement family income and also looked after my dad and my elderly grandmother. Those were dark days for my family as money was really tight at home. Before my dad's illness, he used to be the sole bread-winner. So you can imagine the kind of stress my parents went through, trying to support 3 kids and an elder. It wasn't easy and my parents quarelled frequently over money issues. Nevertheless, my mom became the de-facto head of the household and became a major pillar of support in the family.

Twenty years later, we managed to pull through those tough times and my siblings got married and eventually set up our own families. But deep in my heart, I will never forget those lean times and as I look back, these experiences made me cherish whenever I have now. Perhaps the greatest gift my parents gave me was my education. As they are illiterate, they strongly believe in providing me and my sibling a good education. They scrimped and saved money to support my education, tuition fees and university fees. Over the years, my education and work experience allow me to have a good job that provides good income. I am forever grateful to my parents for raising me up.

On this special day, I wish my mom a Happy Mother's Day. Thank you mom and I love you!

Magically yours.

Friday, May 11, 2012

My comments on Tan Kin Lian Blog Posting "Consumers who deserved to be ripped off"

I was reading Mr Tan's blog and came across his posting "Consumers who deserved to be ripped off". I was quite angry when he commented that consumers should be ripped off for choosing to buy life insurances. Make no mistake, I totally agreed with him that we should all buy term policies and hospitalization plan for protection purposes. The rest of the money can then be used for investing or consumption. But what I am unhappy was that he made all these comments to the public after he stepped down as CEO from NTUC Income in 2008. I have been a loyal NTUC Income for 13 years and bought 3 life insurance policies during Mr Tan's reign as CEO. I don't ever recall him coming out and advocate people to buy term policies instead of life policies back then. In fact, he used to be the face of NTUC Income, until of course he stepped down as CEO. Because of him, I have bought three life insurance policies from NTUC Income. I wish he had made all these comments to the public back then rather then now.

My views on Singapore's low birth rate

In my previous post, "Sentiments of a Singaporean", one of my readers pointed out whether it is fair to burden taxpayers who are single and do not have children with heavy costs of baby bonuses. Actually before he responded, I already knew where he is coming from. It is human nature to feel sour grape seeing others who have babies receiving monies from the government while you are ineligible . Deep in my heart, I believe this is one reason why policy-makers are so reluctant to give more monies to citizen who are willing to give birth. This is because most of the policy-makers could be either past the child-bearing age or are single and missed the boat to get married. Henceforth, it is perfectly natural that they might feel jealous having to give monies to citizen who are entitled to it. After all, they themselves don't benefit from it, while should they support such proposal?

However, if we are able to cast aside our narrow-mindedness and place national interest before us, I feel that spending the extra $4-5billions dollars is totally justifiable. At least from the perspective of a Singaporean. After all, if we don't implement any drastic measures to increase birth rate soon, we are going to end up paying even much more 10 - 15 years down the road. For sure, at the present birth rate, we are going to import more foreigners to support our economy. What will happen then? More competition for jobs, schools, scholarships and health-care facilities for Singaporeans who are currently "baby-boomers", "Gen-X" and "Gen-Y". In the long run, Singaporeans will end up paying even more, in terms of opportunity costs.

Magically yours

Wednesday, May 9, 2012

Knowledge is key

Through interactions with some of my rich friends, I came to realise that no investors become wealthy through herd investing. In order to become a successful investor, we need to equip ourselves with the right knowledge. It is very important that you start your investment or wealth-building journey early on in your life because that will give you a headstart. But before you start splashing out money on various investment schemes, always always remember to build up your knowledge first. If you plan to invest in property, options, gold, ETF, etc, attend courses and seminars to deepen your understanding on how these investments work. Read up topics on these subjects in the magazines, books and online articles on investment strategies. Talk to people, listen to their tips and learn from their investment mistakes. In short, sharpen your knowledge on investment first before you start investing. Don't be in a hurry to lose your money. You will realize that the more you learn, the more you don't know. Have fun.

Magically yours.

Tuesday, May 8, 2012


My blog's pageviews will be hitting 25,000 soon! This is very heartening and encouraging to me. Although my blog's readership is nowhere near the millions of hits enjoyed by popular bloggers like Xiaxue and Tan Kin Lian, I am pleased that there are quite a few people who took time to read my blog and provided me feedbacks. I am also glad that most of the comments given were matured and non-provocative, which is encouraging as it spurs me to keep on blogging. I would like to give thanks to you readers for your precious time and feedbacks. Although I am unable to blog as often as I used to be (due to work and family commitments), I would try my best to squeeze in some time to blog down some of my investment and money-making journey. The experiences captured in this blog is not only for sharing of knowledge, but also serve as a form of an online scrapbook to me, reminding me to avoid some of the pitfalls I suffered during the early days of my investment journey. Hopefully through this sharing, you and me can become a better and richer investor.

If you notice, my blog consists of investment articles and business ideas articles. Occasionally I also blog about some new developments in Singapore. I believe that in Singapore, there are many money-making opportunities but then again, as a society, I feel that we shouldn't focus too much on material gains and comfort. We need to take a step back and reflect on what we really want to achieve in life. I know it sound damn cliche but life is really too short to be obsessed over how much to save for our retirement and how money to make. There are many things that we should spend time and focus on, for example our health, our relationship with family and friends. After all, if we lost our job, investments or business, we can always find another job/opportunity and earn back the money. But if we lose our health, family and friends, can we really earn it back?

I started this blog when I was 30 years old. As I matured and grew, my thinking and perspective to life also changes as well. I hope that as my thinking evolve, this blog also changes as well. Changes in life are inevitable but hopefully its for the better. The focus of this blog shall remain as before: to share and seek out money-making opportunities. But besides this, in the future, I hope to share with my readers a deeper insight on life from me.

Magically yours

Thursday, May 3, 2012

Investment Insight 2012: Thakral

In 2010, I invested a fair bit of money in Thakral, one of the listed companies in Singapore. At that point of time, they declared their intention to change business focus and also proposed a significant dividend for the shareholders. I did some research on the company and decided to invest, tempted by the declared dividend. Eventually, I did receive the dividends, but the stock prices fell in tandem. As the stock prices languished at that price, I sold my Thakral shares after a couple of months. Subsequently I did keep track of the stock price and company performance. For 2 years, the price remained at S$0.030.

Recently, due to the penny stock rally, I realized that Thakral had rocketed to S$0.040. I wondered if I had kept faith with Thakral, I would have made thousands of profits in ONE WEEK.I don't know if you ever have such investment experience but it sure pain like hell seeing the stock which you once owned rocketed by so much.

I sure am tempted to re-enter the stock market but still stand by my resolution to wait till the next stock market crash and then invest. Hopefully I can make a killing by then.

Magically yours